Since 1988, the government has handed over £35 billion of taxpayers' money to the pensions industry to invest on behalf of those people who were advised to opt into a personal pension.

Of that £35 billion, around £3 billion has been paid to pension providers and financial advisers in charges. But a combination of high charges, poor investment performance and a huge abdication of responsibility from the government and the pensions industry have produced yet another pensions scandal, says the consumer body.

71 per cent of people in the Which? study look likely to receive a lower pension from their contracted-out personal pension than they would have got from the additional state pension scheme.

The losers in the study, on average, look set to get just 80 per cent of the pension they would have received if they'd stayed in the state scheme.

Those over 50 are the most likely to have lost out. Only one person out of 22 aged over 50 is on target to get a better pension by contracting out.

The really big losers are those who stayed contracted out after 1997. This year is important because it's when National Insurance rebates became age-related — the younger you are, the less rebate you now get.

"Given the government's stated concern over the so-called pensions saving gap, it is high time it gave us some clear direction on opting out, before millions lose out," said Malcolm Coles, editor of Which? magazine.

Coles himself looks set to lose out on £800 a year when he retires. He contracted out in an attempt to improve his final pension. Since 1993, the government has paid £11,919 in rebates to his personal pension provider. It has turned that into just £12,587 over 12 years. "Its charges are high, but its skill at investing my money is low", says Coles.

Which? is so alarmed by its findings that it is issuing immediate advice to consumers. It has also informed the Pensions Minister, Stephen Timms, and the Financial Services Authority (FSA).